Growing and Preserving Innovation in America Act of 2025
The Growing and Preserving Innovation in America Act of 2025 would modify how the deduction for foreign-derived intangible income (FDII) is calculated under the Internal Revenue Code. Specifically, it would change the calculation so that, in the relevant provision, 37.5% is substituted for 50%, effectively reducing the FDII deduction from a 50% rate to 37.5%. The amendment takes effect on the date of enactment. In practice, this would lessen the federal tax benefit of FDII for U.S. corporations with foreign-derived income, potentially increasing their corporate tax liability. The bill is introduced in the House by Rep. Feenstra (with Rep. Morelle) and referred to the Ways and Means Committee. Note: The bill’s title suggests repealing a “scheduled reduction,” but the text as written implements a change to apply a 37.5% rate in place of a 50% rate, which would reduce the deduction rather than revert to a higher level.
Key Points
- 1The bill changes the FDII deduction calculation under Section 250(a)(3) by substituting 37.5% for 50% in the applicable formula.
- 2The amendment applies to the calculation described in paragraph (1)(B) (as interpreted by the bill’s language).
- 3Effective date: the changes take effect on the date of enactment.
- 4The bill does not create new credits or other tax changes beyond the FDII deduction calculation.
- 5Legislative status: introduced in the House on February 6, 2025 by Rep. Feenstra for himself and Rep. Morelle; referred to the Committee on Ways and Means.